College Planning: Why You Should Care

One of the proudest moments a parent can have is to watch their children receive college diplomas in commencement. A college degree is the embodiment of hard work and financial commitment from both students and their parents. However, planning for college education has become more challenging as we face unprecedented times - there is a record number of college applicants, state universities are losing subsidies, tuition costs are soaring, and students (and their families) end up with tremendous debt. So how do we plan for college, one of the biggest investment decisions in our life? Here are some insights I learned at a recent presentation by BK Crokcer of Crocker College Consulting.

Pay Attention to College Admission Trends to Help with Applications

1. More college applicants: More students are pursuing college, and with the help of technology, it is easier for them to apply to multiple schools with one common application. Also, there have been tremendous marketing efforts from colleges to increase applications, the higher the number of applications a school receives (and rejects) the higher ranking it’ll receive in the US News and World Report.
2. Higher standard: A bigger pool of applicants means a higher standard of admission. Many schools now require applicants to declare majors and they will be competing against other applicants within the same major. This Chart shows you the UC – University of California - admission statistics from 2012.
3. Increase in early acceptances: Many schools want to lock in the quality candidates as early as they can. Apply early if you can.
4. Gender: Girls are approaching 60% of undergrad population in liberal art schools/majors. So boys may have an easier time getting in or vise versa for girls for engineering schools/majors.
5. More accessibility for under-represented populations: 45% of UC students fall under this category which means the rest of the population will have to compete for the remaining 55% spots.
6. Math through senior year: Technically students are only required to take Algebra 2. However, to stay competitive, you need a 4- year math plan for high school. Even CSU – California State University - says math is strongly recommended during senior year. It is believed that math is strongly correlated with success in College.
7. “Test optional” colleges: If your child is not a good test-taker, look for alternate path to admission.
8. Demonstrated interest is very important: Show your involvement and interest by visiting the college, going to college fairs, and speaking with your regional representatives. This is will make your application more compelling for smaller and private colleges.
9. California community colleges: Community colleges used to be all things for all people - not any more due to budget cuts. You need to make sure your children plan ahead to meet one of the three objectives: (1) Pathway for transfer to CSU/UC; (2) Career and tech education; (3) Pre-college basic skills. Be aware that students are required to attend orientation, take assessments, get counseling, and declare a course of study BEFORE they can register for classes. There are also limits on course reputability to prevent student s from “lingering”.

Important Factors for College Admission

1. Grades in college prep courses: Only grades in college prep courses truly matter.
2. Rigor of your coursework: Not all 4.0s are alike. For example, AP calculus is weighted more than AP environmental science. The rule of thumb is to take the most demanding course schedule available and get the best grade you can.
3. SAT/ACT Test Scores
4. Grade trends: Colleges like to see a student with the strongest grades in junior and senior years.
5. Other: Class ranking, teacher/counselor recommendations, essays, demonstrated interest, and activities are important factors as well. Some colleges may compare a students’ class ranking against his/her peers from the same high school.

Plan Ahead

1. Understand the reality that a full pay student has an advantage in college admissions.
2. Discuss and implement a saving strategy early with your trusted financial advisors. We use realistic assumptions to make college projections for our clients to determine the best saving plan (keep in mind that costs average $80-$240k). Also, budget for 5 years of tuition or more per student given that statistics show 60% of students graduate in 6 years.
3. Take advantage of tax-advantaged plans such as 529 accounts to save for college.
4. Don’t overestimate the amount of financial aid you may get (especially middle income families); colleges have no responsibility to fund any financial gaps.
5. Understand how the “Expected Family Contribution” is calculated with one or both of the below methods. The biggest factors on both methods are parent’s previous-year income, number in household, number of children in college, and age of parents.See this Chart for a comparison of the methods.
   1. FAFSA/Federal Methodology (www.fafsa.gov): If divorced, this method only looks at custodial-parent assets.
   2. CSS Profile/Institutional Methodology (www.collegeboard.com): Roughly 250 colleges use this method which is more restricted. If divorced, non-custodial parent’s assets are included.
6. Help your children plan their high school coursework. You don’t need to be a helicopter parent but balancing rigorous coursework, keeping up with their interests and self-confidence may be a tough choice.
7. Apply to college early; don’t wait until the admission deadline.
8. Address Fit vs. Brand Name: Discuss academic fit, social fit, and financial fit with your children. Evaluate cost vs. value of degree from each potential college choice.